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UPDATE 1-Lear earnings top expectations; stock rises

(Adds stock price move, sales by geographic region)

DETROIT, July 25 (Reuters) - Lear Corp, maker of auto seats and electrical power systems, on Friday beat Wall Street's earnings expectations for the second quarter and increased its full-year outlook, sending its shares up as much as 5 percent.

The stronger-than-expected results came despite weakness in South America and flat margins in the company's important seating business.

Excluding one-time items that were primarily restructuring costs, Lear earned $2.12 per share. Analysts polled by Thomson Reuters I/B/E/S had expected $1.97.

Chief Executive Officer Matt Simoncini said the company had set quarterly records for sales and core operating earnings because of investments to improve its "cost structure and expanding our component capabilities globally."

Revenue rose 11 percent to $4.59 billion, exceeding expectations of $4.44 billion, against the backdrop of auto industry production growth of 3 percent in the second quarter.

Profit margins for the suburban Detroit company rose to 6 percent from 5.4 percent a year earlier. Margins in the electrical systems business were 12.5 percent, up from 9.7 percent, but dipped in the larger seating business to 5.7 percent from 5.8 percent.

Sales in the company's Europe and Africa business, $1.58 billion, accounted for 40 percent of the total, followed by North America at $1.74 billion, or 38 percent. Asian sales of $774.3 million accounted for 17 percent, and South America had $237.7 million, or 5 percent.

Sales rose 16 percent in Europe and Africa, 12 percent in North America and 10 percent in China but fell 13 percent in South America.

Lear joined other automotive-related companies in experiencing a fall in South American business as the region's countries like Brazil, Argentina and Venezuela are going through difficult economic times.

Net income for the quarter rose to $148.5 million, or $1.81 per share, from $137.3 million, or $1.60 per share, a year earlier.

The company said it expected sales for the year to range from $17.6 billion to $17.9 billion. It had previously forecast $17.2 billion to $17.7 billion.

Lear said it expected core operating earnings of $975 million to $1.025 billion, up from a previous range of $935 million to $985 million.

In morning trading, Lear shares rose 3.4 percent to $99.02 on the New York Stock Exchange after trading as high as $100.58.

(Reporting by Bernie Woodall; Editing by Lisa Von Ahn)